Special Coverage

Laurel cuts takeout to 11.4 percent

Laurel Park in Maryland plans to cut its takeout during its 10-day summer meet beginning Aug. 10 to a blended rate of 11.4, the lowest take in the country, officials for Laurel said on Wednesday.

Lou Raffetto, the chief operating officer of the Maryland Jockey Club, which owns Laurel and its sister track Pimlico, said that the cut was made to attract bettors to the Laurel signal at a time when most of the racing world is focused on Saratoga and Del Mar.

"We're so far down the pecking order at that time that I want to do something to bump us up," Raffetto said. "Everyone in the industry always says this is the right thing to do, everyone always talks the talk, and now we're going to try it."

Laurel's summer meet runs Aug. 10-23. Raffetto said the track will card nine races a day, with at least four on the turf.

Actually, Laurel is cutting the takeout to 10 percent, but because of legislatively mandated contributions to a fund for the Maryland Million, a series of stakes for horses sired by Maryland stallions, the exact takeout for Laurel's three categories of pools will be 11 percent for win, place, and show, 12 percent for exactas and daily doubles, and 10.75 percent for trifectas, superfectas, pick three, pick four, and pick six wagers.

The cut apparently will level the playing field between bettors who receive rebates and those that do not. Most high-level horseplayers who wager through rebate shops receive rebates that cut the effective takeout rate to approximately 10 percent. Raffetto said he believes that rebate shops will stop giving rebates on the Laurel signal.

Kirk Brooks, the owner of Racing and Gaming Services, a large rebate shop based on St. Kitts, said in an e-mail message that he applauded Laurel's decision.

"Reduced takeouts are good for racing and can help to make racing more competitive with other forms of gambling," Brooks wrote. "Regardless of whether it comes in the form of a discount of a higher payment, returning a higher percentage to the betting public will increase the churn through the pools."

Laurel will need to see a 10-percent increase in ontrack betting and a 30-percent increase in out-of-state betting in order to break even, Raffetto said. Handle on Laurel's simulcast signal last year was approximately $1.5 million a day.

Cutting the takeout is a risky business decision for any track in the modern horseracing industry, since 90 percent of bets are placed at out-of-state locations. Because those locations keep the difference between what they pay for a signal - typically 3 percent - and the takeout, they will retain far less on the Laurel summer signal than they did last year under the old takeout rates, and some may elect not to take Laurel at all.

In 2001, Keeneland Racecourse reduced its takeout across-the-board to 16 percent for its three-week spring meet. As a result of the reduction, the Midatlantic Cooperative, a group of 17 tracks that jointly sell and buy racing signals, initially refused to take Keeneland's races, but an agreement was later reached a week into the meet to put the signal back on.

The executive director of the cooperative, Marty Lieberman, said on Wednesday that the cooperative has not yet made a decision as to whether it will take the Laurel signal.

"We cheer on any experiments that might redound to the benefit of the racing fan," Lieberman said, "but there are so many items that have to go into this calculus. So it's under discussion."

The Maryland Jockey Club is owned by Magna Entertainment, which earlier this year formed a partnership with Churchill Downs Inc. to jointly buy and sell simulcast signals. Together, the two companies own more than a dozen racetracks.

Scott Daruty, the chief executive of TrackNet, said on Wednesday that so far no outlet has said it will refuse to take the signal. The signal will be available on Churchill's account-wagering platforms, which include twinspires.com, brisbet.com, winticket.com, and tsn.com, and Magna's account-wagering platform, XpressBet, Daruty said.